At its lowest on Thursday, the Nasdaq was 19.34 percent lower than its peak closing high on July 20, and about 35 points shy of being confirmed in bear territory. The S&P financial sector , already the worst performer among the 10 major sectors on the index, led the rout with a 3.23 percent decline, its steepest drop since Sept. 1. The rout in financial stocks is being led by banks as investors fear that the negative interest rates employed by a growing band of central banks to spur economic growth is now part of the problem rather than the solution.
Global stock markets are on their shakiest footing in years. Investors are fleeing stocks and running to safe-havens like bonds and gold, driven by concerns about economic growth the effectiveness of central banks' policies. At the same time, tumbling energy prices are upending the economies of oil-producing countries, further slicing into global economic growth.
By Lindsay Dunsmuir and Jonathan Spicer WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen returned to Congress with a brave face on Thursday amid a worsening meltdown in global markets and growing skepticism the U.S. central bank can carry out its long-planned pivot to "normal" monetary policy. Testifying for a second straight day before lawmakers, Yellen repeatedly stressed that the Fed is not on a "pre-set path" even though, for now, she still expects it to gradually raise interest rates this year, given the strong U.S. labor market and other bright spots in the economy. With investors stampeding to safer assets globally, the head of the world's most influential central bank acknowledged that a weakened global economy and a steep slide in stock markets was tightening financial conditions faster than the Fed wants.